Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 1 of 26 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ORIGINAL Before The Honorable Haywood S. Gilliam, Jr., Judge UNITED STATES OF AMERICA, ) ) Plaintiff, ) ) VS. ) ) DANIEL RUSH, ) ) Defendant. ) ____________________________) Change of Plea NO. CR 15-00454 HSG Pages 1 - 26 Oakland, California Thursday, June 22, 2017 REPORTER'S TRANSCRIPT OF PROCEEDINGS APPEARANCES: For Plaintiff: BY: For Defendant: BY: Brian J. Stretch, Esq. United States Attorney 450 Golden Gate Avenue, 11th Floor San Francisco, California 94102 JOHN H. HEMANN, KATHERINE L. WAWRZYNIAK, Assistant United States Attorneys Law Offices of Michael Jerome Kennedy, PLLC 333 Flint Street Reno, Nevada 89501 Michael J. Kennedy, Attorney at Law Alan P. Caplan, Attorney at Law 630 Carolina Street San Francisco, California 94107 Reported By: Raynee H. Mercado CSR. No. 8258 Proceedings reported by electronic/mechanical stenography; transcript produced by computer-aided transcription. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 2 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 2 of 26 1 Thursday, June 20, 2017 2 3 4 5 6 7 8 9 10 1:03 p.m. P R O C E E D I N G S THE CLERK: And we're calling CR15-00454, the United States of America versus Daniel Rush. Please step forward and state your appearances for the record, please. MR. HEMANN: Good afternoon. Wawrzyniak for the United States. THE COURT: MR. KENNEDY: Good afternoon. Sorry, Your Honor. 11 Your Honor. 12 Rush, who's to my right. THE COURT: 14 MR. CAPLAN: 15 THE COURT: MR. KENNEDY: 18 THE COURT: 20 All right. Good afternoon. Good afternoon. I understand Mr. Rush wishes to enter a guilty plea this afternoon? 17 19 Good afternoon, Michael Kennedy with Alan Caplan here with Daniel 13 16 John Hemann and Kathryn He does. All right. Do I have the signed original plea agreement? MR. HEMANN: Your Honor, I'm handing up a version of 21 plea agreement that's been signed by Mr. Rush, myself and 22 Mr. Kennedy. 23 24 25 THE COURT: All right. And I assume no changes from the versions that was forward earlier in the week. MR. HEMANN: No, Your Honor. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 3 of 26 1 2 3 THE COURT: Madam Clerk, will you please swear THE CLERK: I will. 3 Mr. Rush. 4 (Defendant sworn.) 5 THE COURT: 6 THE DEFENDANT: 7 THE COURT: All right. Good afternoon, Mr. Rush. Good afternoon, Your Honor. So I'm required to ask you a number of 8 questions at this time, and there are two reasons for that. 9 One is that I need to be certain that you understand the 10 consequences of your guilty plea. 11 THE DEFENDANT: 12 THE COURT: Yes, sir. And second is that I need to ensure that 13 there is a factual basis for the plea; in other words that 14 you're pleading guilty because you are in fact guilty of the 15 offense that you'll be pleading guilty to. 16 THE DEFENDANT: 17 THE COURT: 18 All right. THE DEFENDANT: 20 THE COURT: Yes, sir. truthfully and fully answer my questions? THE DEFENDANT: 23 THE COURT: 25 Do you understand that you're And that means that you're required to 22 24 I understand. now under oath? 19 21 Yes, sir. Yes, sir. All right. Do you understand that if you don't truthfully answer my questions that could be the basis for additional charges RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 4 of 26 4 1 against you by the United States Attorney's Office including 2 perjury or false statement under oath? 3 THE DEFENDANT: 4 THE COURT: 5 Yes, sir. All right. And you may consult with your counsel at any time if you 6 have questions for them. 7 unclear, please be sure to let me know that so I can clarify 8 it for you. 9 10 11 All right? THE DEFENDANT: THE COURT: So Mr. -- Mr. Rush, what is your full name? THE DEFENDANT: 13 THE COURT: 14 THE DEFENDANT: 15 THE COURT: 16 THE DEFENDANT: 17 THE COURT: 18 THE DEFENDANT: 20 Yes, sir. All right. 12 19 And if I say anything that's Daniel James Rush. And where were you born? Oakland, California. How old are you? Fifty-six years old. And how far did you go in school? I never graduated high school, but I got a few college credits. THE COURT: All right. 21 And have you taken any medication, drugs, or alcohol 22 recently that would affect your ability to understand today's 23 proceeding or the conversation we're having? 24 THE DEFENDANT: 25 THE COURT: None. All right. Have you been treated RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 5 of 26 1 recently for any mental illness or addiction to alcohol or 2 drugs of any kind? 3 THE DEFENDANT: I've been in treatment for alcoholism 4 and drug addiction for 17 -- 15 years this year. 5 clean-and-sober addict and alcoholic. 6 7 8 9 10 11 12 13 14 THE COURT: Would -- Would anything about your treatment over the recent past affect your ability to understand the proceeding today or your evaluation of the plea agreement? THE DEFENDANT: THE COURT: All right. 17 THE DEFENDANT: 18 THE COURT: I have. Have you reviewed those yourself? I have. Did you fully discuss the charges and the case in general with your counsel? 20 THE DEFENDANT: 21 THE COURT: 25 And have you received a written copy of the charges pending against you? THE COURT: 24 I am clear, sober, and understand intimately what we're doing, Your Honor. 16 23 I'm a -- It does. THE DEFENDANT: 22 And I'm a And I believe that answers your question. 15 19 5 Yes, sir. All right. Mr. Hemann, if you would first explain the elements of the charged offenses to which Mr. Rush proposes to plead guilty? MR. HEMANN: Yes, Your Honor. The parties have agreed that Mr. Rush will plead guilty to RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 6 of 26 6 1 three counts in the indictment, counts one, ten, and fourteen. 2 Count one charges Mr. Rush with receiving illegal payments 3 as a union employee in violation of 29 United States Code 4 Section 186 (b)(1). 5 offense. There are six -- or five elements of that 6 The first element is that he, Mr. Rush, was a 7 representative or an employee of a labor organization. 8 9 10 Second, that Mr. Rush directly request or indirectly requested, demanded, received, or accepted or agreed to receive or accept a thing of value exceeding $1,000. 11 The third element is that he did so from a person who 12 employed individuals who were members or potential members of 13 a labor organization for which he was representative officer 14 or employee. 15 The fourth element is that the employees in question were 16 or could be employed in an industry affecting interstate or 17 foreign commerce. 18 19 20 And five, that he knowingly and willfully -- that he acted knowingly and willfully. Count ten, the second charge to which Mr. Rush proposes to 21 plead guilty, charges him with honest services wire fraud in 22 violation of 18 United States Code Sections 1343 and 1346. 23 There are four elements -- I'm sorry -- six elements to that 24 offense. 25 First that Mr. Rush devised or -- and knowingly RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 7 of 26 7 1 participated or knowingly participated in a scheme or plan to 2 deprive the United Food and Commercial Workers Union of his 3 honest service. 4 5 6 7 8 9 10 11 12 The second element is that the scheme or plan included kickbacks in exchange for his services. The third element is that he owed a fiduciary duty to the UFCW. Four, that he acted with the intent to defraud by depriving the UFCW of its right to his honest services. The fifth element is that the act -- that the acts in question were material. And the sixth element is that he used or caused someone to 13 use a wire communication to carry out or attempt to carry out 14 the scheme or plan. 15 The third count to which Mr. Rush proposes to plead guilty 16 charges him with conspiracy in violation of 18 United States 17 Code Section 371. 18 The elements of that offense are as follows: First that 19 there was an agreement between two or more people to structure 20 transactions to evade reporting requirements in violation of 21 31 United States Code Section 5324(a)(3) to engage in monetary 22 transactions and property derived from illegal activity in 23 violation of 18 United States Code Section 1957. 24 launder money in violation of 18 United States Code Section 25 1956(a)(1)(B). RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 And to Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 8 of 26 1 8 Second element is that he became a member of the 2 conspiracy knowing of at least one of its objects and 3 intending to help accomplish it. 4 And three, that one of the members of the conspiracy 5 performed at least one overt act for the purpose of carrying 6 out the conspiracy. 7 THE COURT: All right. And, Mr. Kennedy, do you 8 agree with the government's statement of the elements of the 9 offense? 10 MR. KENNEDY: 11 THE COURT: I do. All right. 12 Mr. Rush, do you understand the nature of the charges that 13 the government has brought to which you are proposing to plead 14 guilty? 15 THE DEFENDANT: 16 THE COURT: I do. And with regard to the factual basis for 17 the charges and for the guilty plea, if you look at paragraph 18 2 of your plea agreement, starting on page 3, and 19 continuing -- 20 21 (Off-the-record discussion.) THE COURT: -- over to the middle of page 5, there 22 are a number of facts that are set out in that paragraph 2. 23 Before today's hearing, have you carefully reviewed 24 25 everything in that paragraph 2? THE DEFENDANT: I have, Your Honor. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 9 of 26 1 2 THE COURT: 9 And then are all of those facts set out in paragraph 2 true? 3 THE DEFENDANT: 4 THE COURT: Yes, sir. Are you satisfied that you've had 5 sufficient time to review the plea agreement with your 6 attorney? 7 THE DEFENDANT: 8 THE COURT: 9 THE DEFENDANT: 10 THE COURT: Yes, I am. Did you read it yourself? I had. And are you satisfied that your attorney 11 explained the plea agreement to you completely and answered 12 any questions that you had about it? 13 14 15 THE DEFENDANT: I am very satisfied, Your Honor. Yes. THE COURT: And I have a written copy of the plea 16 agreement that was handed up to me at the beginning of the 17 hearing, and it's signed by Mr. Hemann, by Mr. Caplan and 18 Mr. Kennedy. 19 there is a signature there (indicating). And then on the top line for your signature, 20 Is that your signature? 21 THE DEFENDANT: 22 THE COURT: 23 24 25 Yes, it is, Your Honor. Did you sign the plea agreement today in open court? THE DEFENDANT: I signed it recently within the last half hour. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 10 of 26 1 2 THE COURT: All right. 10 All right. And, Mr. Rush, does the plea agreement 3 represent the full understanding that you have with the 4 government? 5 not some sort of promise or understanding that you have other 6 than what is set out in the plea agreement. 7 8 9 10 11 In other words, I need to be sure that there is Is this the full agreement that you have with the government? THE DEFENDANT: THE COURT: Yes, it is, Your Honor. And, Mr. Kennedy, were all formal plea offers by the government conveyed to Mr. Rush? 12 MR. KENNEDY: 13 THE COURT: They were. Mr. Rush, are you fully satisfied with 14 the representation and advice given to you by your attorneys 15 in this case? 16 THE DEFENDANT: 17 THE COURT: I am, Your Honor. Has anyone in any way attempted to force 18 you to plead guilty or threatened you or done anything else to 19 coerce you to plead guilty in this matter? 20 THE DEFENDANT: 21 THE COURT: No, sir. And, again, other than what's in the plea 22 agreement, has anyone made any sort of promise or assurance to 23 you of any kind to encourage or persuade you to plead guilty 24 in this case? 25 THE DEFENDANT: Nothing outside the -- of the plea, RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 11 of 26 1 Your Honor. 2 THE COURT: All right. Are you pleading guilty of 3 your own free will because you're, in fact, guilty of the 4 offense we've discussed? 5 THE DEFENDANT: 6 THE COURT: I am, Your Honor. So the next topic that we need to discuss 7 is the rights that you are giving up by pleading guilty. 8 important that you understand those. 9 persist in your plea of not guilty? 11 not required to plead guilty. 12 Do you understand that? 13 THE DEFENDANT: 14 THE COURT: 16 It's First, do you understand that you have the right to 10 15 11 In other words, you're I do, Your Honor. And by pleading guilty, you're giving up a number of rights, and we'll talk about those now. First, you're giving up your right to a speedy and public 17 trial by a jury of 12 citizens of this district who would be 18 selected at random, who would be required to presume your 19 innocence, and who, to convict you, would all 12 have to agree 20 that the government has proven your guilty beyond a reasonable 21 doubt. 22 Do you understand the trial right? 23 THE DEFENDANT: 24 THE COURT: 25 I do, Your Honor. And you would have the right to be represented by counsel at trial and all the other stages of RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 12 of 26 1 12 this proceeding. 2 Do you understand that? 3 THE DEFENDANT: 4 THE COURT: I understand, Your Honor. And at a trial, you would have the right 5 to present evidence, to confront and cross-examine witnesses, 6 and to compel the attendance of witnesses. 7 Do you understand that? 8 THE DEFENDANT: 9 THE COURT: 10 I do, Your Honor. And do you understand that at trial, you would have the right to testify if you chose? 11 THE DEFENDANT: 12 THE COURT: I do, Your Honor. Do you also understand that you would 13 also have the right to choose not to testify or present any 14 evidence at trial? 15 THE DEFENDANT: 16 THE COURT: I understand, Your Honor. And do you understand that if you chose 17 not to testify or present any evidence, that decision could 18 not be held against you? 19 Do you understand that? 20 THE DEFENDANT: 21 THE COURT: I do, Your Honor. All right. And do you understand by 22 entering a plea of guilty, if I accept it, there will be no 23 trial? 24 and you'll be adjudged guilty of the offense. 25 You will have waived all those rights we talked about, THE DEFENDANT: I understand, Your Honor. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 13 of 26 1 THE COURT: 13 And in your plea agreement, you have also 2 agreed to a waiver of your right to appeal your conviction. 3 This is at paragraph 4 of the plea agreement. 4 agreeing to give up your right to appeal your conviction, the 5 judgment, and any orders of the court, as well as any aspect 6 of the sentence that I impose with the limited exception that 7 you're reserving a right the claim that your counsel was 8 ineffective. 9 And you're Do you understand the nature of that waiver? 10 THE DEFENDANT: 11 THE COURT: I understand, Your Honor. All right. And then similarly in 12 paragraph 5, you're agreeing not to file a collateral attack 13 on your conviction or sentence, and that's sometimes referred 14 to as a habeas petition, again with the narrow exception that 15 you're reserving the right to claim that your counsel was 16 ineffective. 17 18 Do you understand that waiver of your right to collaterally attack your conviction and sentence? 19 THE DEFENDANT: 20 THE COURT: 21 Have you discussed those waivers with your counsel? 22 THE DEFENDANT: 23 THE COURT: 24 25 I understand, Your Honor. At length, Your Honor. All right. And are you waiving those rights as described there knowingly and voluntarily? THE DEFENDANT: I am, Your Honor. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 14 of 26 1 THE COURT: 14 Now, do you understand that the -- the 2 terms of the plea agreement are simply recommendations to the 3 court on the part of the parties but that I am not required to 4 accept those -- those recommendations? 5 Do you understand that? 6 THE DEFENDANT: 7 THE COURT: I do, Your Honor. And one consequence of that is that if I 8 impose a sentence that is more severe than you might 9 anticipate or that you might -- you or your counsel might be 10 predicting, that will not be a basis for withdrawing your 11 guilty plea. 12 Do you understand? 13 THE DEFENDANT: 14 THE COURT: I understand, your Honor. Now, you're pleading guilty in this case 15 to three felony offenses, and a felony conviction carries with 16 it the deprivation of a number of important civil rights 17 including your right to vote, your right to hold public 18 office, your right to serve on a jury, and your right to 19 possess any kind of firearm or ammunition. 20 Do you understand that? 21 THE DEFENDANT: 22 THE COURT: I understand, Your Honor. And do you understand that having a 23 felony conviction may make it difficult to get certain types 24 of benefits, public benefits, or business licenses, and the 25 public benefits affected could include living in public RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 15 of 26 1 15 housing. 2 Do you understand that? 3 THE DEFENDANT: 4 THE COURT: I understand, Your Honor. And here, because you are pleading guilty 5 to three felony counts, do you understand that it is possible 6 that the sentence for those convictions could be run 7 consecutively? 8 In other words, that the option exists under the law for 9 one -- the sentence for one to be completed, then the second 10 one starts, and then that one's completed, then the third one 11 starts? That's a possibility. 12 THE DEFENDANT: 13 THE COURT: 14 15 16 Do you understand that? I understand that, Your Honor. All right. Mr. Hemann, would you please describe the maximum potential penalties applicable in the case. MR. HEMANN: Yes, Your Honor. 17 The maximum penalties for count one and the violation of 18 the Taft Hartley Act is a maximum prison term of five years, 19 maximum fine of $15,000, and a maximum term of supervised 20 release of 3 years, plus the possibility of restitution, a 21 mandatory special assessment of $100, and the possibility of 22 forfeiture. 23 The maximum penalties for count ten, the wire fraud count, 24 are a maximum prison term of 20 years, a maximum fine of 25 $250,000, a maximum term of supervised release of 3 years, RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 16 of 26 16 1 forfeiture, restitution, and a supervised release -- a special 2 assessment of $100. 3 The maximum penalties for the conspiracy counts are 5 4 years in prison, a maximum fine of $250,000, a maximum term of 5 supervised release of 3 years, restitution, forfeiture, and a 6 mandatory special assessment of $100. 7 THE COURT: All right. And am I correct in reading 8 paragraph 9 to reflect that the government is not seeking 9 forfeiture or restitution in this case? 10 MR. HEMANN: 11 THE COURT: That is correct, Your Honor. All right. Mr. Kennedy, do you agree 12 that the government's description of the maximum penalties is 13 accurate? 14 MR. KENNEDY: 15 THE COURT: I do. And, Mr. Rush, do you understand that 16 those are the maximum penalties that you could face in this 17 case? 18 THE DEFENDANT: 19 THE COURT: 20 I do, Your Honor. All right. And do you understand that when I determine your sentence, 21 I'm required to consider something called the sentencing 22 guidelines and calculate an advisory guidelines range as part 23 of the process? 24 25 Have you discussed that with your counsel. THE DEFENDANT: I do, Your Honor. I have. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 17 of 26 1 THE COURT: All right. 17 And do you understand that in 2 determining what the appropriate sentence should be, I'm 3 required to consider that advisory guidelines range, as well 4 as a number of factors under the federal sentencing statute in 5 arriving at a sentence? 6 THE DEFENDANT: 7 8 9 I -- I understand, and I'm hoping that you do, Your Honor. THE COURT: All right. And do you understand that I will not be able to determine 10 the advisory guidelines for your case until after I receive a 11 presentence report from the Probation office containing 12 information about your background? 13 information that is relevant to your sentence that I don't 14 have right now. 15 Do you understand that? 16 THE DEFENDANT: 17 THE COURT: In other words, there's I do, Your Honor. All right. 18 And do you understand that if I impose a sentence of 19 imprisonment that includes a term of what's called supervised 20 release, that you would be required to adhere to a number of 21 conditions for the term of your supervised release? 22 THE DEFENDANT: 23 THE COURT: I understand that, Your Honor. And do you understand that if you violate 24 the conditions of your supervised release, that could result 25 in additional time in prison on top of what you had already RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 18 of 26 1 served for the underlying offense? 2 3 18 THE DEFENDANT: I understand, Your Honor. I'm looking forward to starting anew here and answering 4 for what I need to answer for and creating a new life for my 5 family and, frankly, going back to my work would be -- in 6 addiction and recovery, it's -- it's been a huge part of my 7 life. 8 THE COURT: All right. 9 I may have asked you this, but have you discussed with 10 your attorney how the sentencing guidelines might apply to 11 your case? 12 THE DEFENDANT: 13 MR. KENNEDY: 14 THE DEFENDANT: 15 16 17 I believe I -- I would say yes. Yes. I'm sorry. wounds, Your Honor, and in quite a bit of pain. THE COURT: All right. THE DEFENDANT: 19 respect for the court and stand. 21 THE COURT: I'll stand and -- and I'll have All right. I think -- I think we should -- the hearing shouldn't last too much longer. 22 THE DEFENDANT: 23 THE COURT: 24 MR. HEMANN: 25 Are you -- Are you -- Is the pain affecting your ability to understand or proceed? 18 20 I'm standing on open Yes, sir. All right. Your Honor, I just -- the court asked whether the pain that Mr. Rush is experiencing is affecting RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 19 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 19 of 26 1 his ability to understand the court's questions and answer 2 them, and I'm not sure Mr. Rush answered that question. 3 THE COURT: 4 THE DEFENDANT: 5 MR. HEMANN: 6 THE DEFENDANT: 7 Absolutely not. Thank you, Your Honor. There's nothing going on that affects my understanding and willingness to -- to do this. 8 9 Just I thought he did, but -- THE COURT: All right. And if you -- if you need to take a moment and sit down or 10 otherwise rest, that's -- I will absolutely do that. 11 right? 12 13 THE DEFENDANT: Thank you. All Thank you. It's important to me that I respect the court. 14 THE COURT: 15 THE DEFENDANT: 16 MR. KENNEDY: All right. Thank you. And, Your Honor, I told Mr. Rush if it 17 came to that point in time to just let me know and I would ask 18 the court. 19 THE COURT: 20 THE DEFENDANT: 21 THE COURT: 22 All right. All right. Thank you, Your Honor. You're welcome. And then with regard to -- there are a couple 23 of particular provisions of the plea agreement I should bring 24 to your attention. 25 All right. So in paragraph 7 of your plea agreement, RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 20 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 20 of 26 1 there are -- there's an advisory guidelines calculation what's 2 important is the concept that we talked about before, is that 3 do you understand regardless of the sentence that I impose, 4 you won't be entitled to nor will you ask to withdraw your 5 guilty plea? 6 THE DEFENDANT: 7 THE COURT: I understand. All right. And you're agreeing not to 8 request a downward departure under the sentencing guidelines 9 although you're reserving your right to seek what's called a 10 variance to a lower sentence and the government is free to 11 oppose that request. 12 Do you understand that? 13 THE DEFENDANT: 14 THE COURT: I understand that, Your Honor. Yes. All right. 15 And then in paragraph 8 of your plea agreement, you're 16 agreeing to a special condition of supervised release that 17 would require you to submit your person, residence, office, 18 vehicle, electronic devices, and data to a search to be 19 conducted by a U.S. Probation Officer or any federal, state, 20 or local law enforcement officer at any time with or without 21 suspicion. 22 Do you understand that? 23 THE DEFENDANT: 24 THE COURT: 25 I understand, Your Honor. All right. And do you understand that you're agreeing that failure to RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 21 of 26 1 submit to such a search could be grounds for revocation of 2 your supervised release? 3 THE DEFENDANT: 4 THE COURT: 5 6 I understand that, Your Honor. All right. And you're also required to warn any residents that the premises may be subject to search. 7 Do you understand that? 8 THE DEFENDANT: 9 I understand. I have and will continue to do so. 10 11 21 THE COURT: All right. All right. Are there any other provisions of the plea 12 agreement I should bring to Mr. Rush's attention in 13 particular? 14 MR. KENNEDY: Your Honor, I believe the government's 15 promises is that at sentencing, they'll move to dismiss the 16 pending charges in the indictment with prejudice not file any 17 additional charges against Mr. Rush, and -- and they agree to 18 recommend a sentence within the range calculated on paragraph 19 7 unless he were to violate the terms of the condition, and 20 that's set forth in paragraphs 13, 14, and 15, Your Honor, on 21 page 8. 22 23 THE COURT: All right. Mr. Hemann, do you agree with that characterization? 24 MR. HEMANN: 25 THE COURT: Yes, Your Honor. All right. Do you understand the -- that RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 22 of 26 1 those are the promises the government is making to you, 2 Mr. Rush? 3 THE DEFENDANT: 4 THE COURT: 22 I understand, Your Honor. And it also appears based on paragraph 9 5 that the government is agreeing not to take any action to 6 require you or your spouse to sell your primary residence in 7 Crescent City, California to satisfy any judgment. 8 MR. KENNEDY: 9 THE DEFENDANT: That is correct, Your Honor. 10 THE COURT: 11 THE DEFENDANT: 12 THE COURT: Yes. Do you understand? I understand that. Thank you. All right. 13 Any -- Well, the other thing I should mention is do you 14 understand, Mr. Rush, that there's no parole in the federal 15 criminal system so that if you're sentenced to prison you will 16 not be released on parole? 17 THE DEFENDANT: 18 THE COURT: 19 20 All right. Any other provisions I should bring to Mr. Rush's attention? 21 MR. HEMANN: 22 THE COURT: 23 MR. KENNEDY: 24 THE COURT: 25 I understand, Your Honor. I don't believe so, Your Honor. Mr. Kennedy? None, Your Honor. Thank you. All right. So Mr. -- Mr. Rush, do you understand the consequences of RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 23 of 26 1 23 your plea as we've discussed this afternoon? 2 THE DEFENDANT: 3 THE COURT: I do, Your Honor. Do you have any further questions or need 4 to obtain any additional legal advice from your counsel before 5 we proceed? 6 THE DEFENDANT: 7 THE COURT: 8 9 I don't, Your Honor. All right. So I'll ask you, Mr. Rush, how do you plead to count one of the indictment filed on September 7th, 2015 alleging a 10 violation of Title 29, United States Code Section 186 (b)(1), 11 receiving an illegal payment to a union employee? 12 not guilty? 13 THE DEFENDANT: 14 THE COURT: Guilty or Guilty, Your Honor. And how do you plead to count ten of that 15 indictment alleging a violation of Title 18 United States Code 16 Sections 1343 and 1346, honest services wire fraud? 17 not guilty? 18 THE DEFENDANT: 19 THE COURT: Guilty or Guilty, Your Honor. And how do you plead to count 14 of that 20 indictment alleging a violation of Title 18, United States 21 Code Section 371, conspiracy to commit structuring and money 22 laundering? Guilty or guilty? 23 THE DEFENDANT: 24 THE COURT: 25 Guilty, Your Honor. All right. Mr. Kennedy, do you agree that Mr. Rush is competent and RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 24 of 26 1 24 capable of entering a plea? 2 MR. KENNEDY: 3 THE COURT: I do. All right. 4 It is the finding of the court that the defendant is fully 5 competent and capable of entering an informed plea; that he is 6 aware of the nature of the charges and the consequences of his 7 plea; that his plea of guilty is a knowing and voluntary one 8 supported by an independent basis in fact containing each of 9 the essential elements of the offense. 10 11 12 13 14 The plea is therefore accepted. The defendant is now adjudged guilty of the offense. I will reserve acceptance of the plea agreement until sentencing. We'll now refer the case to the Probation Office for the 15 preparation of that probation or presentence report that we 16 discussed. 17 Probation Office. 18 The government will provide information to the You and your counsel will have the opportunity to present 19 evidence. 20 the report. 21 from counsel for the United States. 22 counsel. 23 personally at sentencing. 24 25 You'll have the ability to respond to a draft of And then at the sentencing hearing, I'll hear I'll hear from your And you will have the opportunity to be heard All right? THE DEFENDANT: I look forward to it, Your Honor. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 25 of 26 1 2 THE COURT: All right. Madam Clerk, a date for sentencing. 3 THE CLERK: 4 in this department. 5 MR. KENNEDY: September 25th, Your Honor, at 2:00 p.m. Your Honor, rather than come back and 6 ask for a date, I anticipate a conflict in late September. 7 Could we move to an October date so we don't have to do it 8 twice? 9 THE COURT: Should be fine with me. 10 THE CLERK: Is there a specific October date or 11 October 2nd is fine? 12 MR. KENNEDY: 13 THE CLERK: October 2nd, Your Honor. 14 THE COURT: All right. October 2nd should be fine. Thank you. So over to October 2nd for 15 sentencing. 16 release on his current terms of pretrial release? I assume no objection to Mr. Rush remaining on 17 MR. HEMANN: 18 THE COURT: 19 25 No, Your Honor. All right. So, Mr. Rush, you just need to continue to abide by all 20 the conditions of your pretrial release. 21 appear is its own violation, and any violation of your terms 22 of release could be a basis for your being remanded into 23 custody, so it's very important for you to simply continue to 24 adhere very carefully to all of the conditions of release that 25 you been following since the case started. Obviously failure to RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 Case 4:15-cr-00454-HSG Document 129 Filed 09/07/17 Page 26 of 26 1 THE DEFENDANT: 2 THE COURT: 3 Anything further for today? MR. HEMANN: 5 MR. KENNEDY: 6 THE COURT: No, Your Honor. No, Your Honor. All right. Thank you. We'll see you back in -- in October. 8 9 I understand, Your Honor. All right. 4 7 26 MR. HEMANN: Thank you for accommodating us on short notice. 10 MR. KENNEDY: 11 THE COURT: Thank you, Your Honor. You're welcome. 12 (Proceedings were concluded at 1:29 P.M.) 13 --o0o-- 14 CERTIFICATE OF REPORTER 15 16 I certify that the foregoing is a correct transcript 17 from the record of proceedings in the above-entitled matter. 18 I further certify that I am neither counsel for, related to, 19 nor employed by any of the parties to the action in which this 20 hearing was taken, and further that I am not financially nor 21 otherwise interested in the outcome of the action. 22 23 ___________________________________ 24 Raynee H. Mercado, CSR, RMR, CRR, FCRR, CCRR 25 Friday, August 25, 2017 RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530